Chinese Buyers Reengage at Global Dairy Trade Auctions: Is a China Comeback on the Horizon?
Source: The DairyNews
Chinese participation in the Global Dairy Trade (GDT) auctions is showing signs of resurgence, prompting speculation about a potential comeback for China in the global dairy market.
The latest GDT auction witnessed a notable uptick in prices across various dairy products. Overall, prices experienced a 2.8% increase, with whole milk powder (WMP) prices surging by 3.4%, reaching approximately US$3246 per metric tonne.
China, renowned as the world's largest dairy importer and Fonterra's primary market for WMP, had previously retreated due to economic uncertainties stemming fr om Covid-related lockdowns.
ASB economist Nat Keall observed a moderate increase in Chinese activity at the WMP market compared to the previous auction, wh ere prices had sharply declined. However, Keall cautions that the sustainability of this trend remains uncertain and will require monitoring over subsequent auctions.
Kelly Eckhold, chief economist at Westpac, also noted the resurgence of Chinese buyers, alongside buyers from the Middle East and Europe. European buyers, in particular, exhibited a notable increase in participation, signaling potential shifts in global dairy dynamics.
Despite the recent price fluctuations, Fonterra projects a milk price range of $7.50-8.10/kgMS for the remaining season, with ASB forecasting $8/kgMS and Westpac $7.90/kgMS. Keall emphasizes that Fonterra's hedging practices provide stability, with minimal expected impact on this season's milk price.
Looking ahead, Keall anticipates WMP prices to maintain a relatively stable trajectory within the US$3000-3500/MT range, with significant movements likely to occur in the latter half of the year.
Farmers are eagerly awaiting the opening forecast milk price for the upcoming season, starting June 1. ASB forecasts an optimistic opening price of $8.35/kgMS, buoyed by favorable exchange rate movements benefiting Fonterra's hedging strategies.
China, renowned as the world's largest dairy importer and Fonterra's primary market for WMP, had previously retreated due to economic uncertainties stemming fr om Covid-related lockdowns.
ASB economist Nat Keall observed a moderate increase in Chinese activity at the WMP market compared to the previous auction, wh ere prices had sharply declined. However, Keall cautions that the sustainability of this trend remains uncertain and will require monitoring over subsequent auctions.
Kelly Eckhold, chief economist at Westpac, also noted the resurgence of Chinese buyers, alongside buyers from the Middle East and Europe. European buyers, in particular, exhibited a notable increase in participation, signaling potential shifts in global dairy dynamics.
Despite the recent price fluctuations, Fonterra projects a milk price range of $7.50-8.10/kgMS for the remaining season, with ASB forecasting $8/kgMS and Westpac $7.90/kgMS. Keall emphasizes that Fonterra's hedging practices provide stability, with minimal expected impact on this season's milk price.
Looking ahead, Keall anticipates WMP prices to maintain a relatively stable trajectory within the US$3000-3500/MT range, with significant movements likely to occur in the latter half of the year.
Farmers are eagerly awaiting the opening forecast milk price for the upcoming season, starting June 1. ASB forecasts an optimistic opening price of $8.35/kgMS, buoyed by favorable exchange rate movements benefiting Fonterra's hedging strategies.
